Email this article to a friend

Two of the biggest French asset management companies have expanded overseas this week, with one acquiring a business in the US and another opening a new office in the Middle East, as the country's fund managers continued to grow last year despite the credit crunch, according to a new report.

The changes are under the direction of the new business development chief Philippe Zaouati, who was hired from rival Crédit Agricole Asset Management last July. Zaouati has separated the sales staff into six client departments and put marketer Christophe Point in charge.

Gateway Advisors will join the French group's existing roster of 12 US investment boutiques, which include real estate manager AEW Capital Management and activist investor Harris Associates. The French bank did not say how much it had paid for Gateway.

Founded in 1977, Gateway specialises in equity funds that are hedged against stock market falls through the use of derivatives, such as options. It has $7.9bn under management.

Separately, Zaouati's former employer Crédit Agricole Asset Management has created a joint venture in Saudi Arabia with the country's sixth-largest bank, Banque Saudi Fransi. It will be led by Richard Lepère, formerly head of consultant relations at the French group.

CAAM Saudi Fransi, as the venture will be known, is the latest step in Crédit Agricole's effort to raise its profile in the region.

In November it gave Gulf director Christian Lainé a new remit of fostering better relations with the region's clutch of sovereign wealth funds, which are large pools of capital funded by oil wealth that have been making high-profile investments in the developed world in recent months.

The total money run by the French asset management industry expanded by 1.7% last year to nearly €2.5 trillion ($3.7 trillion), according to last month's annual report from the Association Française de la Gestion Financière or AFG, a trade body.

The rate of growth was far slower than in recent years when assets swelled by at least 12% annually since 2003, but remained positive despite the impact of the credit crisis.

Enhanced money market funds, which are cash investments that buy riskier assets in a bid to improve returns, were particularly hard-hit, AFG said. It promised 2008 would be a "year of dialogue with investors", aimed at learning the lessons of the liquidity crisis.

The association said: "Market turbulence put a strong damper on growth, but the number of management companies continued to increase rapidly, with nearly 50 new companies formed."

The UK's equivalent trade body, the Investment Management Association, has not yet finalised its 2007 figures. In 2006, the UK industry managed about £3 trillion (€4 trillion), it said.